Page 68 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 3: Reissue of Forfeited Shares and Bonus Issue

(d) Laxam Limited forfeited 80 shares of 50 each 40 were called up issued at 5% discount on Notes
which 2,400 has been paid. These shares were reissued to Mr. Ram for a payment of
2,800 credited as fully paid.
(e) Alfa Limited forfeited 250 shares of 50 each fully called up for non-payment of final call
of 25 per share. Subsequently, 200 shares were reissued at 65 per share as fully paid.

(f) Thomson Limited forfeited 250 shares of 50 each, 45 were called up issued at 8%
premium to Mr. Axe on which he failed to pay allotment (including premium) of 15 and
first call of 10. Out of these forfeited shares, 150 shares were reissued to Mr. Waye as fully
called up for 40 per share and 50 shares to Mr. Zed as fully paid up for 60 and 50 shares
to Mr. Dawlo as fully paid up for 25. These all were issued on different dates.
Solution:
Journal Entries
Date Particulars L.F. Dr. ( ) Cr. ( )
Share Capital Account (100 × 50) Dr. 5,000
To Share Allotment Account (100 × 15) 1,500
To Share Find Call Account (100 × 20) 2,000
To Forfeited Shares Account (100 × 15) 1,500
(Being 100 shares forfeited for non-payment of allotment
and final call money)
Bank Account (100 × 40) Dr. 4,000
Forfeited Shares Account (100 × 10) Dr. 1,000
To Share Capital Account (100 × 50) 5,000
(Being reissue of forfeited share @ 40 per share)
Forfeited Share Account Dr. 500
To Capital Reserve Account 500
(Profit on reissue of forfeited shares transferred to capital
reserve i.e., 1500 – 1000)
Share Capital Account (300 × 70) Dr. 21,000
To Share First Call Account (300 × 20) 6,000
To Forfeited Shares Account (300 × 50) 15,000
(Being forfeiture of 300 shares for non-payment of first call
of 20 each share)
Bank Account (300 × 50) Dr. 15,000
Forfeited Shares Account (300 × 20) Dr. 6,000
To Share Capital Account (300 × 70) 21,000
(Being reissue of 300 shares @ 50 per share at a discount
of 20 per share)
Forfeited Share Account Dr. 9,000
To Capital Reserve Account 9,000
(Profit on reissue of forfeited shares transferred to capital
reserve i.e., 15,000 – 6,000)
Share Capital Account (500 × 30) Dr. 15,000
To Calls-in-Arrear Account (500 × 10) 5,000
To Discount on Issue of Shares Account (500 × 5) 2,500
To Forfeited Shares Account (500 × 15) 7,500
(Being forfeiture of 500 shares for non-payment of call
money)
Bank Account (300 × 30) Dr. 9,000
Contd...
Discount on Issue of Shares Account (300 × 5) Dr. 1,500
Forfeited Shares Account (300 × 5) Dr. 1,500
To Share Capital Account (300 × 40) 12,000
(Being reissue of 300 shares for 30 per share as paid up
40 each) LOVELY PROFESSIONAL UNIVERSITY 61
Forfeited Shares Account Dr. 3,000
To Capital Reserve Account 3,000
(Being profit on reissue of 300 forfeited shares transferred
8 7,500 ö
to capital reserve i.e. 8 8 300 ö – 1,500)
8 500 ö
Share Capital Account (80 × 25) Dr. 3,200
To Call-in-Arrear Account (80 × 2.50) 600
To Discount on Issue of Shares Account (80 × 2.50)
To Forfeited Share Account 2,400
(Being forfeiture of 80 shares for non-payment of call
money)